EIA Oil Stocks Preview: Crude Draw & Product Builds Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (15:30 GMT) today.

• Crude inventories are expected to show a draw of -0.908mbbl for the week ending 19 January according to a Bloomberg survey. Crude stocks data last week showed an unexpected draw driven by a surge in exports back above 5mb/d and despite a large increase in exports and production returning to a record 13.3mb/d. US oil production was disrupted last week due to severe cold across the US. North Dakota’s oil production disruption saw losses peak at around 700k b/d on Jan. 17 before starting to recover amid warming weather. Production losses in the Permian Basin of Texas and New Mexico were estimated at around 6m barrels and shut-in output in North Dakota’s Bakken was close to 3.5m barrels according to Bloomberg sources. The US production drop and recent dip in Cushing stocks have helped drive the WTI-Brent spread up from a low of -$5.9$/bbl on Jan. 17 to around -$5.1/bbl today.
• Refinery utilisation fell less than expected down to 92.6% last week, although the East Coast was the lowest since November. Refinery utilisation is expected to decline further in today’s data, amid rising US outages. Winter Storm Geri took around 15% of US Gulf Coast crude-processing capacity offline, according to Wood Mackenzie. Utilisation is expected to dip by another -0.58% this week to 92.0% according to a Bloomberg survey.
• Total US gasoline stocks are expected to build again this week by +1.41mbbl and distillates by +0.58mbbl according to a Bloomberg survey. Gasoline stocks last week rose to the highest since Feb 2022 with a dip in implied demand set against a drop in production and higher exports. Four-week average gasoline demand fell in line with the norm to hold near to the five-year average but is expected to fall further in data this week. GasBuddy and OPIS are both showing a drop in demand last week to 7.78mbpd. Demand fell by around 6.1% last week according to GasBuddy while OPIS shows a drop of 5.8% on the week.
• Distillates stocks also gained last week to the highest since Aug 2021 despite lower production and imports on the week. Weak demand continues to weigh on US crack spreads with four-week distillate demand last week below the previous five-year range and the lowest since Jul 2020.
• The API data released last night showed a large crude draw of -6.67mbbl with a draw of -2.03mbbl at Cushing. Gasoline inventories showed a large increase of +7.18mbbl however distillates stocks dipped by -0.245mbbl.